Assume that your firm's marginal tax rate is 35% and that your firm has the following capital structure. Your firm does not issue preferred stocks. What is your firm's WACC?

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a

10.900%

b

10.025%

c

8.200%

d

7.450%

e

6.800%

Debt $60 MM $50 MM Book value of bonds Market value of bonds Coupon Rate Pre-tax cost of debt (e.g., YTM) 6.0% 7.5% Common Equity $20 MM Book value of common equity Market value of common equity Required return (e.g. from the CAPM) $25 MM 12.6%